# Pricing practical work

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Section 1. Pricing strategy of the firm
The demand function for product X is given:, where PX and PY are prices of goods X and Y. Suppose,. Determine the elasticity of demand for product X at the price of this product modulo

The demand function is defined as, define what is the modulus of the price elasticity of demand for P = 5.

Based on the data below, find the percentage change in sales revenue if the market price increases by 10%. Econometric studies show the following value of price elasticity (elasticity is given by modulus): Japanese business class cars in Russia - 2,8

An economist studying the international commodity market has determined that the price elasticity of demand is (–2). This market involves 10 countries that produce the same amount of the investigated product. What will be the modulus elasticity for a given country that produces the given product?

The demand function for the monopolist's products has the form. Its cost function is. The monopolist produced and sold 100 units of products. What is the “market capacity” (value A)?

The firm sells one million units for \$ 100 each. The firm's marginal cost is constant at \$ 40, and its average total cost (assuming one million units output) is \$ 90. The firm estimates the price elasticity of demand for its products as constant and equal modulo 2,0. Calculate the million dollar profit at the optimal price by giving the answer to the first decimal place

There are 5 firms in the industry. Prices (P), sales volumes (Q) and marginal cost values ​​(MC) are presented in the table
N P q MC
1 5 10 4
2 6 9 4
3 7 8 5
4 8 8 5
5 9 6 6

There are 5 firms in the industry. Prices (P), sales volumes (Q) and marginal cost values ​​(MC) are presented in the table. Please determine the Herfindahl index
Section 2. Theory and practice of price discrimination of consumers.
Suppose that BMW can produce any number of cars at a constant marginal cost of \$ 15 and a fixed cost of \$ 20 million is actually equal to:
; ,
where the EUROPE index stands for Europe and the US index stands for the USA, and all prices and costs are shown in thousands of dollars. Suppose BMW can make US sales only by authorized dealers
How many vehicles should BMW sell in each market?

What is the total profit (answer in million dollars and round to the nearest whole)?

If BMW were forced to charge the same price in each market, what would the firm charge? What is the total profit (answer in million dollars and round to the nearest whole)?

A pharmaceutical firm owns a patent for a new drug. A medicine can be produced either in country A or in country B. The production costs in these countries are equal:
; According to expert estimates, the demand for a new drug is
How much should the new drug be sold?
What will be the price and what will be the manufacturer's surplus of the pharmaceutical firm?

How will the production decision of the company change if the demand rises to. How much will the company sell the drug in this case?

What will be the price and the producer's surplus:

The transport company plans to release tram and bus passes. There are 3 equal in size categories of the population: the first one travels on trams more often, and is ready to pay up to 450 rubles for travel on them. per month, and for a bus - no more than 150 rubles. The second, on the contrary, uses the bus more often, therefore, is ready to pay 400 rubles for it. and 200 rubles for a minibus. The third - does not go on buses in principle (not ready to pay a ruble), and will pay up to 550 rubles for a minibus pass. How will the expected income per passenger change if the company issues a single pass instead of different bus and tram passes?

Suppose that the monopolist's demand function depends not only on the price of the product, but also on the amount of advertising chosen by the firm (denoted by A, measured in rubles). The type of the demand curve will be specified as The cost function of the monopolist will be specified as. What should be the optimal amount of advertising spend?

Section 3. Marketing and the theory of consumer behavior